Congress returns from its Memorial Day recess to four full weeks of legislative activity. The drama of the American Health Care Act (AHCA) now hangs over the Senate. The House will return to its regular work once they advance the FDA User Fee Reauthorization, with the Senate also having to schedule floor time for the package. Also on our radar this month will be the date June 21st– the date in which insurers decide if they will participate in the Obamacare Marketplace for 2018. This could play a role in the Administration’s ongoing discussions regarding cost-sharing reductions, as well as how the Senate approaches its version of the AHCA. Continue Reading Congress Returns for June Session to Face AHCA, User Fees and More

Our ML Strategies colleagues have published a preview for another big week in health care. The American Health Care Act (AHCA) continues to be a big story as the Senate works on its version. This week we watch for updates on these items and how they might impact AHCA discussions:

Cost-sharing reductions (CSRs) litigation on Monday

President Trump’s anticipated budget proposal on Tuesday

The Congressional Budget Office (CBO) score on the House AHCA on Wednesday

Scheduled hearings in the House and Senate on Tuesday (Zika response), Wednesday (FY 2018 budget) and Thursday (budget proposals for Treasury and Tax Reform)

Despite reports last Friday that President Trump may seek to stop the CSRs paid to insurers, on Monday the Administration requested another 90 day extension in the House v. Price case. In a joint filing, the House and the Department of Justice requested the extension as they consider measures that might remove the need for the payments, including legislation to repeal the Affordable Care Act.

On Tuesday, President Trump’s budget proposal will be released. We anticipate major cuts to Medicaid, and to supplemental income and nutritional assistance programs. Then on Wednesday, the CBO will release its score of the AHCA. We don’t anticipate major changes from the original results, but stay tuned for updates.

One of the challenges of policy making is that bills must go before the Congressional Budget Office (CBO). CBO has one of the toughest jobs in Washington. Their job is to dispassionately look at policy and evaluate the cost of the bill to the federal treasury. Sometimes that means splashing cold water on the high-minded aspirations of policy makers. And CBO’s brand of actuarial water can be icy cold.

In health care, one of the most perplexing areas for policymakers is convincing CBO that providing additional services to individuals can lead to lower cost outcomes. Obesity reduction was a particularly problematic policy area. Advocates argued that through the deployment of intensive supports, individuals could lose weight and keep weight off thus improving their overall health outcomes. CBO did extensive research and found that weight loss only had an effect on health outcomes for the most morbidly obese. If you are only moderately overweight (BMI 25 to 30), weight loss or gain has no effect on health outcomes. So go enjoy that donut. Continue Reading Research Opens a Door for Disability Policy

Top news this week is the continued scrutiny of drug pricing. Between Congress, payors, and physician groups, the biopharmaceutical industry is facing significant headwinds and will be tasked with changing the value proposition (or at least articulating it differently) in order to withstand the pressure from stakeholders on cost and comparative effectiveness.

In keeping with the cost theme, the CBO released new estimates showing that the Affordable Care Act would be less costly and cover more people than previous reports. We believe the major debate after open enrollment is now shifting to cost containment, which will be the context for many legislative and regulatory debates to come in 2014 and going forward.

As was widely expected over the month of December, the Obama Administration and Congress scrambled in the late hours of 2012 and on New Year’s Day devising a legislative package to prevent the United States from going over the “Fiscal Cliff,” a series of across-the-board tax increases and spending cuts that would have automatically implemented without intervening legislative action. Although the compromise they reached was far from the “Grand Bargain” that President Obama and many members of Congress were seeking, Vice President Biden and Senate leadership came to an agreement to avoid the cliff for the early part of 2013. The Senate approved the package, the American Taxpayer Relief Act (H.R. 8), by an overwhelmingly bipartisan vote of 89-8 in the early morning hours of New Year’s Day. Later that day, shortly before midnight, the House voted to approve the Senate package by a vote of 257-167, with 85 Republicans joining 172 Democrats in support.

The legislation contains some significant health policy changes, described in more detail in a Mintz Levin/ML Strategies Client Alert, although its primary purpose is to prevent steep tax increases for 99% of Americans and to delay the automatic “sequestration” spending cuts that were scheduled to go into effect due to an earlier agreement to raise the debt ceiling. In H.R. 8, which the Congressional Budget Office (CBO) estimates will cost around $4 trillion, the sequester is turned off for two months, allowing Congress more time to focus on a comprehensive deficit reduction solution. In addition, current tax rates are permanently extended for all Americans earning up to $400,000 for individuals and $450,000 for married couples. Several other major tax modifications, including some related to the estate tax and capital gains, were also included. Discussion about other aspects of the legislation, including changes to renewable energy programs, may be found here.

Although the American Taxpayer Relief Act has prevented the country from going over the “fiscal cliff,” the 113th Congress will almost certainly continue to focus on health care cost containment and entitlement reform in the coming weeks and months. Mintz Levin and ML Strategies will continue to closely monitor the effect of fiscal policy on health care.

Associate Editors

Mintz Levin’s Health Law Practice

As the health care and life sciences industries continue to undergo sweeping regulatory change, your company might be facing unprecedented structural and operational challenges. Heightened government scrutiny of industry practices certainly adds to the complexity of operating in the market for all providers, payors, manufacturers, distributors, and suppliers.Read More